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Corporate Score 32 Bullish

Churchill Downs Diversifies Beyond the Kentucky Derby to Drive Long-Term Value

Apr 12, 2026 16:05 UTC
CHDN
Medium term

While the upcoming Kentucky Derby provides high visibility, Churchill Downs' core strength lies in its diversified gaming portfolio and real estate holdings. The company leverages historical racing machines and regional casinos to maintain steady revenue streams.

  • 2025 revenue reached $2.92 billion with $1.2 billion in EBITDA
  • Gaming unit generated $1.44 billion in revenue and $637 million in adjusted EBITDA
  • Last year's Kentucky Derby handle hit a record $473.9 million
  • Company owns all its real estate, reducing overhead and landlord risk
  • $2.1 billion in shares repurchased since 2015
  • Dividend payouts have increased for 15 consecutive years

As the first Saturday of May approaches, investor attention is turning toward Churchill Downs (CHDN) and the anticipated surge in betting activity for the Kentucky Derby. While the 'Run for the Roses' remains a marquee event, the company's financial stability is increasingly decoupled from a single race day. The operator's broader strategy focuses on a mix of live racing, historical racing machines (HRMs), and regional casino operations. By controlling 10,000 HRMs across 16 locations in Kentucky and Virginia, the company has created a consistent revenue engine that complements its seasonal peaks. In 2025, Churchill Downs reported total revenue of $2.92 billion and EBITDA of $1.2 billion. The gaming unit, which combines live and historical operations, contributed $1.44 billion to revenue and $637 million to adjusted EBITDA. Last year's Derby handle reached a record $473.9 million, setting a high bar for the upcoming event. A key competitive advantage for CHDN is its ownership of all its real estate, eliminating long-term lease obligations and strengthening the balance sheet. This financial flexibility has enabled aggressive shareholder returns, including $2.1 billion in share repurchases since 2015 and 15 consecutive years of dividend growth.

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